Industry Specific Impact of Commercial Autonomous Vehicles

Last month, Uber made another leap forward in commercial vehicle automation when their recently acquired company Otto made the first controlled autonomous delivery in a controlled pilot. The Otto technology is focused on commercial rigs and for now is limited to highway use. It will require more tests and development before it is ready for full commercial use, but it is getting closer every day.

Agriculture, Forestry, and Fishing: Agriculture already is using autonomous tractors in select areas. The move to having autonomous trucks move raw materials, produce, and livestock from farms, forests, and fisheries to processing plants is a natural use for this technology, and the rural nature of the industry will allow for earlier adoption of these technologies.

Mining: Similar to agriculture, expect use of autonomous trucks early to carry materials from mines to processing plants as the technology becomes available

Construction: Construction equipment is more specialized, but the delivery of goods to construction sites and removal of waste is likely to be a fast follower of other industries.

Manufacturing: Manufacturing’s focus on just-in-time supply chains requires fast, reliable, and cheap transportation of goods throughout the manufacturing process. As they are already heavy users of automation, expect them to be an early adopter.

Transportation: Clearly this industry will be the most heavily disrupted by autonomous vehicles, but there are some interesting sub-notes in this area:

Aviation: Regional airlines will likely take a hit as flights under 300 miles are replaced by drivers using autonomous cars instead.

Bussing: Both school and passenger busses will likely be late adopters given fear and concern over turning large number of passengers over to a system and the driver’s added responsibilities for passenger safety.

Trucking: Will clearly be one of the key leaders in this area, especially with highway and rural use leading the way.

Livery: Livery usage has strong commercial incentives to be a leader in this area, but the complex risks of urban and suburban environments will likely delay widespread adoption until other inroads are made first.

Wholesale: Similar to manufacturing, wholesalers are using autonomous vehicles in warehouses today. They will be an early adopter to the degree it makes financial sense

Retail: Retail is likely to be a later adopter. Assuming delivery to stores and outlets is a transportation/wholesale responsibility, retail’s primary use of fleets is customer delivery. These are often in rural and urban environments, which again will likely lag rural and highway use. Also like bussing, needed support activities such as delivery from the vehicle, payment collection, and customer service will likely delay its use.

Services: Services will vary based on the type of service, but will likely follow a similar path to retail. There are select services that could be impacted more:

Hospitality: Hotels have already faced some disruption of autonomous vehicles. There could be more disruption especially among non-destination locations as autonomous vehicles allow cars and trucks to drive through the night.

Road Services: Towing and repair services will likely be impacted by decreased accidents.

Public Administration: Public administration will likely be a slow adopter for a number of reasons. First, many of its services don’t lend themselves to autonomous vehicles. Second, the economics of reducing salary costs and workers does not have the same push in this environment as others. That being said, there could be pockets of early adopters such as the post office for overnight movement of mail between facilities.

The bottom line: almost every industry will be impacted in some way by autonomous vehicles. For some, the impact will just be to their fleet operations; for others such as regional airlines and non-destination hotels, the impact could be more significant. At the end of the day, regardless of what line of business you write, it is time to start to understand the implications of this disruptive technology.